After Tokyo, Sydney and Melbourne are the largest commercial real estate markets in the Asia-Pacific region, according to the latest edition of Emerging Trends in Real Estate from PwC and the Urban Land Institute (ULI).
Releasing the 60-page report in Sydney on Wednesday, ULI global chief executive Patrick Phillips said for the 350 real estate leaders interviewed for the report, Sydney was number two and Melbourne number three for both investment and development buying.
"They are in the sights of global investors," he said. "They have the best property yields in Asia-Pacific, they are transparent and liquid markets, there is some hope for rental growth, and finance is available." 
But he also expressed some caution after the strong buying and yield compression of recent years.
"I think next year will be a bit of a holding pattern," he said. "There is not a lot of room for cap rates to fall and we have seen a clear exodus from markets that are highly priced like Hong Kong ... There will be time out."
Once again, the non-profit research organisation's report reflects the ongoing tension between strong capital demand, which is pushing values, and tepid demand from occupiers, which is restricting rental growth.
"Although a few investors see current pricing as a high-water mark, the majority believe the growing weight of capital will continue to push up prices, and yields down, albeit at a slowing pace," the report noted.
"Many investors now see rental growth, rather than cap rate compression, as a source of future profits."
Tony Massaro, director of the PwC Real Estate Advisory, said the report showed two schools of thought - one upbeat and one cautious - on future asset price growth in Australia.
"For the right assets in the right locations, there could be more growth," he said, noting that some growth will come from improved income, or at least lower incentives. "Look at it through the macroeconomic lens. Flagship cities are the safest bet because investors have to take into account the pending interest environment."
Mr Massaro predicted that the widely expected increase in rates by the US Federal Reserve would have a knock-on effect, even in the Asia-Pacific region.
"It will not cause the market to grind to a halt, but it will temper the flows of capital and temper returns," he said.
"The Fed changes the relative cost of capital for overseas funds and it changes the attractiveness of property versus other asset classes so that equities become more attractive.
"If rates go up in a measured way, it will be a slow effect. But if they went up quickly, it would have a more detrimental effect on pricing."
Mr Phillips said the Fed's move would be modest. "I don't think it will affect international capital flows. There could be a move to US bond markets and away from real estate, but there is still a lot of money chasing real estate because there is more money allocated to the sector."
The one sector in which investors had a more cautious view on Sydney and Melbourne was apartment investment. A high proportion of respondents would be sellers, Mr Phillips said.
"There is a sense that values have run and it's time to sell, particularly with some policy changes to come."
Key points
Sydney, Melbourne second only to Tokyo in Asia-Pacific among global real estate leaders surveyed for report.
After a strong run, 'holding pattern' tipped for 2016.